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Operating a successful business requires sound decision-making, especially as the company grows. For example, if you must relocate due to growth, you’ll need to decide between leasing or buying your next commercial space. Unfortunately, there is no easy answer to whether it’s better to buy or lease commercial real estate as it depends on factors unique to your company. However, knowing some general advantages and drawbacks of both options can make your decision easier. PROS AND CONS OF BUYING One benefit of purchasing is that the property appreciates over time, meaning it will increase in value. On the other hand, a significant downside of buying is that it requires a large down payment. Other possible pros and cons are: Pro: Rental income potential Con: Financing difficulties Pro: Potential tax benefits Con: Increased liabilities (premises injuries, etc.) When considering the pros and cons of buying a particular property, ensure you account for issues relevant to your business (location, access, etc.). PROS AND CONS OF LEASING Many business owners like the flexibility that comes with leasing a commercial space. If the property fails to meet their needs, they can relocate when the current lease ends. Other advantages and a few downsides of leasing include: Con: No potential for rental income Pro: Fixed (and dependable) monthly expenses Con: Lack of control over the space Pro: Fewer upfront costs Weigh these pros and cons carefully to ensure your commercial real estate decisions do not pose hardships for your business operations. GUIDANCE CAN BRING CLARITY You want to make sound choices in all areas of your company’s operations. An analysis from someone knowledgeable about California commercial real estate can help you find the clarity to make well-informed business property decisions.

Operating a successful business requires sound decision-making, especially as the company grows. For example, if you must relocate due to growth, you’ll need to decide between leasing or buying your next commercial space. Unfortunately, there is no easy answer to whether it’s better to buy or lease commercial real estate as it depends on factors unique to your company. However, knowing some general advantages and drawbacks of both options can make your decision easier. PROS AND CONS OF BUYING One benefit of purchasing is that the property appreciates over time, meaning it will increase in value. On the other hand, a significant downside of buying is that it requires a large down payment. Other possible pros and cons are: Pro: Rental income potential Con: Financing difficulties Pro: Potential tax benefits Con: Increased liabilities (premises injuries, etc.) When considering the pros and cons of buying a particular property, ensure you account for issues relevant to your business (location, access, etc.). PROS AND CONS OF LEASING Many business owners like the flexibility that comes with leasing a commercial space. If the property fails to meet their needs, they can relocate when the current lease ends. Other advantages and a few downsides of leasing include: Con: No potential for rental income Pro: Fixed (and dependable) monthly expenses Con: Lack of control over the space Pro: Fewer upfront costs Weigh these pros and cons carefully to ensure your commercial real estate decisions do not pose hardships for your business operations. GUIDANCE CAN BRING CLARITY You want to make sound choices in all areas of your company’s operations. An analysis from someone knowledgeable about California commercial real estate can help you find the clarity to make well-informed business property decisions.

Completing a commercial property and getting ready to lease is a proud moment for developers. You can lease your space to business owners for offices or industries for warehouses, data centers and other industrial activities. Further, you may lease your property for mixed uses, in which case your tenants may be malls, restaurants, department stores, and so on. Thus, commercial real estate (CRE) is expansive and investing in it offers significant advantages. However, to enjoy these benefits, you need contracts to protect your investment. Here are three factors to include in your commercial lease agreement. PERIODS Your tenants need to know about different periods. Examples include the period in which the lease is considered active, the renewal period of the lease, when insurance coverage requirements will go into effect, the due date of the security deposit and the period for giving notice of termination of the lease. You should write about these periods in individual clauses. USAGE You should explain how a tenant can and can’t use the property in the agreement. This may include the products and services they may offer or even the quality level of their operation. Another aspect is the space to use. If you are leasing to one business, this may not be a major concern. But if you will have co-occupancy spaces, a tenant should know what portion of the property they can use. MAINTENANCE Maintenance is one of the leading causes of landlord-tenant disputes. Thus, your agreement should have this clause, clearly explained to avoid misunderstandings. You should state when you are responsible for maintenance and when a tenant will be held liable. You should draft top-notch commercial lease agreements. It is essential to learn how to negotiate, draft and review agreements to protect your rights.

Completing a commercial property and getting ready to lease is a proud moment for developers. You can lease your space to business owners for offices or industries for warehouses, data centers and other industrial activities. Further, you may lease your property for mixed uses, in which case your tenants may be malls, restaurants, department stores, and so on. Thus, commercial real estate (CRE) is expansive and investing in it offers significant advantages. However, to enjoy these benefits, you need contracts to protect your investment. Here are three factors to include in your commercial lease agreement. PERIODS Your tenants need to know about different periods. Examples include the period in which the lease is considered active, the renewal period of the lease, when insurance coverage requirements will go into effect, the due date of the security deposit and the period for giving notice of termination of the lease. You should write about these periods in individual clauses. USAGE You should explain how a tenant can and can’t use the property in the agreement. This may include the products and services they may offer or even the quality level of their operation. Another aspect is the space to use. If you are leasing to one business, this may not be a major concern. But if you will have co-occupancy spaces, a tenant should know what portion of the property they can use. MAINTENANCE Maintenance is one of the leading causes of landlord-tenant disputes. Thus, your agreement should have this clause, clearly explained to avoid misunderstandings. You should state when you are responsible for maintenance and when a tenant will be held liable. You should draft top-notch commercial lease agreements. It is essential to learn how to negotiate, draft and review agreements to protect your rights.

You operate a pretty tight commercial real estate business, and you fully understand how competitive the market can be in your location. Vacancies are low and rents are high. You’d like to weed out the bad tenants in a prospective group as quickly as possible. Is it acceptable, then, to ask for “key money” in exchange for a lease? It depends. Here are a few things you need to keep in mind: YOU CAN’T ASK FOR KEY MONEY AS A BRIBE It used to be fairly common for landlords to demand a certain amount of cash from a tenant in exchange for a lease. This lump-sum payment is neither a security deposit nor part of their rent, but a bribe. Even long-term tenants were sometimes expected to pay key money to renew their leases. Typically, these payments were made “under the table” – meaning they were kept off the landlord’s books. This is illegal both under California law and under federal tax laws. If you want to demand additional money from a commercial tenant aside from the actual rent, you can, but only under certain conditions. This means: You must include the amount of the payment (however it is described) in the recorded rental agreement with your tenant. You cannot make the payment of key money a prerequisite for taking someone’s application, initiating their lease or continuing it. You do have the right to charge tenants a reasonable fee for the steps you go through while vetting them, and that may include attorney fees. Staying on the right side of the law when you’re a commercial landlord can be trickier than it seems. Experienced legal guidance can help you avoid serious problems.

You operate a pretty tight commercial real estate business, and you fully understand how competitive the market can be in your location. Vacancies are low and rents are high. You’d like to weed out the bad tenants in a prospective group as quickly as possible. Is it acceptable, then, to ask for “key money” in exchange for a lease? It depends. Here are a few things you need to keep in mind: YOU CAN’T ASK FOR KEY MONEY AS A BRIBE It used to be fairly common for landlords to demand a certain amount of cash from a tenant in exchange for a lease. This lump-sum payment is neither a security deposit nor part of their rent, but a bribe. Even long-term tenants were sometimes expected to pay key money to renew their leases. Typically, these payments were made “under the table” – meaning they were kept off the landlord’s books. This is illegal both under California law and under federal tax laws. If you want to demand additional money from a commercial tenant aside from the actual rent, you can, but only under certain conditions. This means: You must include the amount of the payment (however it is described) in the recorded rental agreement with your tenant. You cannot make the payment of key money a prerequisite for taking someone’s application, initiating their lease or continuing it. You do have the right to charge tenants a reasonable fee for the steps you go through while vetting them, and that may include attorney fees. Staying on the right side of the law when you’re a commercial landlord can be trickier than it seems. Experienced legal guidance can help you avoid serious problems.

The lack of affordable housing in California – particularly in the Los Angeles and San Francisco areas – has long been a problem. State lawmakers have been attempting to tackle it via legislation that would provide more and lower-priced housing within a finite amount of space. Last month, Gov. Gavin Newsom signed two bills into law that will allow commercial property owners to convert vacant and underutilized buildings in areas zoned for commercial properties into affordable housing. These include strip malls, office buildings and big chain stores that have been sitting empty or far from fully rented — costing the owners money and becoming a target for vandalism and other crime. The two pieces of legislation, Assembly Bill 2011 and Senate Bill 6, have been stalled in Sacramento as developers, unions and affordable housing advocates fought for their interests. Housing advocates are calling the laws a “game changer” and a “huge deal.” The projects will also provide considerable job opportunities in the construction industry at union-level wages. VACANT PROPERTIES ARE IN URBAN AND RURAL AREAS THROUGHOUT THE STATE While the new laws, which take effect next July, will no doubt impact commercial properties that have been losing money in urban areas, there are a number of properties as well as parking lots in more rural areas of the state that have sat vacant as retailers have moved online and many office workers have begun working remotely. The two laws have requirements regarding wages and the hiring of union workers as well as environmental standards. There are also restrictions on the number of units that can be offered for sale vs. rental and to ensure that housing is available for people at various income levels – including those who can’t currently afford to rent their own homes. It’s crucial for commercial property owners, developers and investors to understand the new laws. Having experienced legal guidance can help you make the most of the opportunities they offer and avoid unnecessary legal issues.

The lack of affordable housing in California – particularly in the Los Angeles and San Francisco areas – has long been a problem. State lawmakers have been attempting to tackle it via legislation that would provide more and lower-priced housing within a finite amount of space. Last month, Gov. Gavin Newsom signed two bills into law that will allow commercial property owners to convert vacant and underutilized buildings in areas zoned for commercial properties into affordable housing. These include strip malls, office buildings and big chain stores that have been sitting empty or far from fully rented — costing the owners money and becoming a target for vandalism and other crime. The two pieces of legislation, Assembly Bill 2011 and Senate Bill 6, have been stalled in Sacramento as developers, unions and affordable housing advocates fought for their interests. Housing advocates are calling the laws a “game changer” and a “huge deal.” The projects will also provide considerable job opportunities in the construction industry at union-level wages. VACANT PROPERTIES ARE IN URBAN AND RURAL AREAS THROUGHOUT THE STATE While the new laws, which take effect next July, will no doubt impact commercial properties that have been losing money in urban areas, there are a number of properties as well as parking lots in more rural areas of the state that have sat vacant as retailers have moved online and many office workers have begun working remotely. The two laws have requirements regarding wages and the hiring of union workers as well as environmental standards. There are also restrictions on the number of units that can be offered for sale vs. rental and to ensure that housing is available for people at various income levels – including those who can’t currently afford to rent their own homes. It’s crucial for commercial property owners, developers and investors to understand the new laws. Having experienced legal guidance can help you make the most of the opportunities they offer and avoid unnecessary legal issues.

A commercial landlord may buy a property with some ideas already in mind about the type of businesses they would like to have in that space. Maybe they just think it fits the area or it fits the type of building that they bought. In any case, it’s their property and they have plans for how they want to develop it. It is common for commercial landlords to ask business owners what type of business they’re going to run as part of the pre-screening process. If the landlord believes that the business idea is not going to be successful, or if they see red flags in the financial statements provided by the business owner, they may decide not to rent to that individual. They’re certainly allowed to do this on the grounds that specific businesses might appear to be too much of a risk to them and they may not believe the lease will be paid. AVOIDING DISCRIMINATION One thing that is important for commercial landlords to remember is that they need to be careful to avoid discriminating against any of the potential tenants. Discrimination on the grounds of things like religion, race or gender is prohibited, just as it is with residential properties. So, a business owner may believe that they can deny someone the space by claiming they don’t want that type of business to be at the location or that they don’t think it is going to succeed. And that’s fine from a business perspective, but they need to be sure that they’re not actually denying it based on one of these protected classes. You can see why it’s so important to get the details right and why anyone working in the commercial property industry needs to make sure they always understand their legal options. You don’t want to make a mistake that puts your investment in jeopardy.

A commercial landlord may buy a property with some ideas already in mind about the type of businesses they would like to have in that space. Maybe they just think it fits the area or it fits the type of building that they bought. In any case, it’s their property and they have plans for how they want to develop it. It is common for commercial landlords to ask business owners what type of business they’re going to run as part of the pre-screening process. If the landlord believes that the business idea is not going to be successful, or if they see red flags in the financial statements provided by the business owner, they may decide not to rent to that individual. They’re certainly allowed to do this on the grounds that specific businesses might appear to be too much of a risk to them and they may not believe the lease will be paid. AVOIDING DISCRIMINATION One thing that is important for commercial landlords to remember is that they need to be careful to avoid discriminating against any of the potential tenants. Discrimination on the grounds of things like religion, race or gender is prohibited, just as it is with residential properties. So, a business owner may believe that they can deny someone the space by claiming they don’t want that type of business to be at the location or that they don’t think it is going to succeed. And that’s fine from a business perspective, but they need to be sure that they’re not actually denying it based on one of these protected classes. You can see why it’s so important to get the details right and why anyone working in the commercial property industry needs to make sure they always understand their legal options. You don’t want to make a mistake that puts your investment in jeopardy.

A positive side effect of business success and growth is gaining more and more customers. You might soon need to consider leasing industrial warehouse space to continue meeting customer demands. These facilities can fill several needs, from facilitating product distribution to storing or manufacturing goods. Although warehouses may look alike, they are not built according to universal specifications. Before agreeing to lease the property, ensure it meets your specific and unique needs. Here are four things to consider: CEILING HEIGHT Square footage is undeniably critical in a warehouse, but so is the structure’s overall height. Ask for the exact dimensions or measure the space to ensure it can accommodate your business operations. CLIMATE CONTROL It might surprise you to learn that some industrial properties do not come with ventilation systems, heat or air conditioning installed. If you want to protect your goods and workers from the warm California weather, look for a well-maintained climate control system. FLOOR CONDITION Floors shoulder the brunt of all the heavy work that goes on inside a warehouse. They can suffer damage over time that could lead to potential disaster. Look for signs of heavy wear and tear and inquire about the weight limits of all flooring. OUTDOOR GROUNDS It is easy to overlook the areas outside of a warehouse, but they can be just as important as your indoor space. Check that the loading docks accommodate your trucking requirements and that the parking lot has sufficient room for employees, large vehicles and visitors. These suggestions and a thorough knowledge of commercial lease regulations ensure you do not get saddled with a useless property. A legal consultation can guide you in making beneficial business decisions.

A positive side effect of business success and growth is gaining more and more customers. You might soon need to consider leasing industrial warehouse space to continue meeting customer demands. These facilities can fill several needs, from facilitating product distribution to storing or manufacturing goods. Although warehouses may look alike, they are not built according to universal specifications. Before agreeing to lease the property, ensure it meets your specific and unique needs. Here are four things to consider: CEILING HEIGHT Square footage is undeniably critical in a warehouse, but so is the structure’s overall height. Ask for the exact dimensions or measure the space to ensure it can accommodate your business operations. CLIMATE CONTROL It might surprise you to learn that some industrial properties do not come with ventilation systems, heat or air conditioning installed. If you want to protect your goods and workers from the warm California weather, look for a well-maintained climate control system. FLOOR CONDITION Floors shoulder the brunt of all the heavy work that goes on inside a warehouse. They can suffer damage over time that could lead to potential disaster. Look for signs of heavy wear and tear and inquire about the weight limits of all flooring. OUTDOOR GROUNDS It is easy to overlook the areas outside of a warehouse, but they can be just as important as your indoor space. Check that the loading docks accommodate your trucking requirements and that the parking lot has sufficient room for employees, large vehicles and visitors. These suggestions and a thorough knowledge of commercial lease regulations ensure you do not get saddled with a useless property. A legal consultation can guide you in making beneficial business decisions.